Anticipation over a Fed interest rates review and oil production outage in Kuwait following widespread labor unrest in the country’s oil industry helped lift U.S. shares on Tuesday. Commodity-linked stocks lifted the Dow Jones Industrial Average (INDEXDJX:.DJI) and the S&P 500 (INDEXSP:.INX). However, worse-than-expected 1Q2016 earnings and soft 2Q2016 guidance by tech companies weighed down the tech-oriented Nasdaq Composite (INDEXNASDAQ:.IXIC).
The improvement in appetite for stocks appears to reflect confidence in the growth of the U.S. economy. Although the housing market has remained a cause for concern, recent labor data that U.S. employers added 215,000 jobs in March lifted investor sentiment, thus interest in equity.
Strike could take some oil out of the market
The days-long strike of Kuwaiti oil workers has also been interpreted positively by investors. Because the labor unrest in Kuwait effected more than half of the country’s oil output, it is expected to reduce the amount of oil flowing into the markets, thus lifting crude prices.
The Dow added 49.44 points or edged up 0.3% to close at 18053.60. The development came just a day after the blue-chip index closed above 18000 for the first time in nine months. With Tuesday’s progress, the Dow has now advanced 15% from its one-year low touched on Feb. 11.
The S&P 500
The S&P 500 advanced 0.3% after gaining 6.46 points to close at 2100.80. Tuesday marked the first time that the S&P hit the 2100 mark this year.
Commodity-linked shares led the gains in the S&P 500. The biggest gainers on S&P 500 in terms of percentage were Transocean LTD (NYSE:RIG) and Freeport-McMoRan Inc (NYSE:FCX), which advanced 9.5% and 9%, respectively. But the technology sector bucked the trend as the sector fell 0.7%.
The Nasdaq Composite Index fell 0.4% after shedding 19.69 points and closed at 4940.33. The tech-oriented index was weighed down by Intel Corporation (NASDAQ:INTC), International Business Machines Corp. (NYSE:IBM) and Netflix, Inc. (NASDAQ:NFLX). These companies either posted 1Q2016 earnings that were weaker than expected or issued a tepid outlook for the coming quarters.
The Nasdaq Composite is down 1.3% in 2016.